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Press review: US troops to exit Syria and Deripaska cedes core assets to lift penalties

Top stories in the Russian press on Thursday, December 20


Media: Washington alerts Moscow that US troops will leave Syria soon

US President Donald Trump traditionally announced via Twitter on Wednesday that Washington had defeated the Islamic State (terror group, outlawed in Russia) and it was time to bring US troops back home. Soon, it was reported that Washington had started withdrawing its troops from Syria, Izvestia writes. According to the latest data, there are more than 2,000 US soldiers in Syria, who were deployed mostly to the area of the eastern bank of the Euphrates River. The White House said that despite the US contingent’s pullout, the coalition's forces will remain in Syria.

Sources in Russia’s Defense Ministry told the paper that Washington had informed Moscow about its plans to withdraw troops from Syria several days before the official announcement. "Recently, the US notified us via the deconfliction channel about the possible start of its withdrawal of troops from Syria. They mentioned the area of Deir ez-Zor," one of the sources said. "This was done to avoid Russia’s questions and concerns when the process begins."

Trump claimed that the US had defeated ISIS in Syria, but neither the Americans nor their allies nor the world community believe this, Chairman of Russia’s State Duma (lower house of parliament) Defense Committee and former Commander of the Russian Airborne Troops, Vladimir Shamanov told Izvestia.

The lawmaker stressed that the success in the struggle against IS in Syria should be fully credited to the Russian Aerospace Defense Forces and the Fleet and their cooperation with Turkish and Iranian units. He lambasted the US pullout from Syria as a "shameful escape," comparing it to their retreat from Vietnam. According to the MP, the US did not plan to defeat ISIS, because "these are their people." He stressed that it was too early to speak about any full triumph over terrorism in Syria. "ISIS needs to be defeated. The Americans will still help these bastards, if not directly, but implicitly. It is known that the coalition forces helped send terrorists from Syria to northwestern Afghanistan. Today, the major danger is ISIS penetration into Turkmenistan and Uzbekistan. Given that fact, new provocations by the militants should be expected," Shamanov stressed.

According to Vladimir Fitin, Head of the Middle East Center at the Russian Institute for Strategic Studies (RISS), Trump’s decision to withdraw US forces will result in reshaping the map of Syrian territory to the east of the Euphrates River. Washington is again betraying its long partners in the region, the Kurds, on whom it had relied over the past two and a half years. By leaving the Kurds in Syria without any support, Washington is actually handing them to the Turkish forces, the expert stressed.

Michael Kofman, senior researcher at the US Center for Naval Analyses, told Vedomosti that the US administration has not yet decided on whether the withdrawal would be full or gradual. Meanwhile, the Pentagon prefers to continue supporting its Kurdish allies and hold on to the levers of influence in the region.

Trump said from the very beginning that Washington's only goal was to defeat ISIS, political scientist Fyodor Lukyanov told the paper. "But the devil is in the detail. Russia had announced cutting or withdrawing its major contingent from Syria nearly three times, and this happened to some degree, but did not mean stopping military presence," the expert noted. The issue is about whom the US will leave in Syria, Lukyanov said. "I think it is evident and clear that some presence will remain, at least in the zone of the Syrian Kurdistan on the border with Turkey. The Kurds are the US' major military ally in Syria and control will remain, but a reduced one. It would be rather strange to fully leave [these areas] given that the Americans had settled there fundamentally." The meaning of Trump’s announcement of his 'victory' over ISIS and the pullout of forces will be clear later after particular actions, he stressed.


Kommersant: Russian tycoon's key assets will shift to US, UK control

Russian businessman Oleg Deripaska has managed to lift US sanctions from his key assets - En+, Rusal and Eurosibenergo. To achieve this goal, the businessman had to sharply reduce his stakes in the companies (some shares of En+ will be given to VTB, Glencore and a charity fund) and also to cede almost full control over them through the boards of directors at Rusal and En+ to US and UK citizens, Kommersant writes. Meanwhile, Deripaska will remain on the blacklist and won’t be able to receive revenues from his assets.

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) reported that it would terminate sanctions against Deripaska’s key assets in 30 days. The condition was to agree on the so-called Barker plan (TOR), outlined to OFAC by En+’s current board chairman Greg Barker under which Deripaska had to cede control over his assets.

The sanctions against Deripaska were due to come into effect in June, but after the talks on the Barker plan began, their implementation was postponed. As a result, the TOR conditions look much like the transfer of control over Deripaska’s assets to the US, Kommersant says. The businessman will keep ownership of just 0.01%. En+ will continue controlling Rusal and Eurosibenergo, but Deripaska’s share in the group will be reduced from 66% to 44.95% without the right to increase it.

En+ will have to hand over to an independent person the votes of shareholders, who have family or professional ties with Deripaska, and the same condition applies to VTB. Besides, neither En+ nor any other subsidiaries of the group will be able to change their place of registration in Russia without being approved by the new board of directors and OFAC. Deripaska will be able to nominate only four out of 12 members in the En+ board of directors, while the others should be independent from him. Six board members should be either US or UK citizens, and the entire board directors of En+ and Rusal should be agreed on by OFAC. As for Rusal, eight out of 14 board members will be independent of Deripaska and its current head, managing director of Nord Stream AG Matthias Warnig, who is believed to be close to Russian President Vladimir Putin, would be expected to leave his post. Washington will also get the right to initiate further checks into possible ties of En+ and Rusal with Deripaska or affiliated parties.

Partner at Herbert Smith Freehills Alexei Panich notes that after the companies escaped sanctions they will be able to continue operations as normal. However, the prices on aluminium are not expected to sharply drop, expert at the Analytical Credit Rating Agency (ACRA) Maxim Khudalov said.


Kommersant: Turkey’s Patriot missile deal with US won’t disrupt supplies of Russia’s S-400s

US President Donald Trump’s administration has greenlighted a contract with Turkey to the tune of $3.5 bln for the supply of Patriot missiles to Ankara. The decision to give the go-ahead for one of the most crucial defense deals with the country, against which the US imposed sanctions this summer, should become a decisive step towards normalizing ties between both allies, Kommersant writes.

However, the unfrozen military cooperation, suspended after Washington’s refusal to supply F-35 fighter jets to Turkey, creates more intrigue around the contract for Russia’s S-400 missile system to Ankara. Experts interviewed by Kommersant say that amid the new developments, Ankara will continue to walk a tightrope between Moscow and Washington, but its rapprochement with Washington won’t disrupt the S-400 deal.

Ankara hopes that if US-Turkish ties normalize Washington will meet its major demand of extraditing Turkish cleric Fethullah Gulen, who is accused of masterminding the failed 2016 coup.

Meanwhile, Trump’s step towards selling the Patriot system to Turkey creates further intrigue on whether Ankara will give up its contract on buying Russia’s S-400 missile system. The contract’s price tag is nearly $2.5 bln, and 55% of the sum is covered by a Russian loan. The first components of the system are due to be delivered to Turkey in summer 2019. Kremlin Spokesman Dmitry Peskov said he saw no grounds for reconsidering the agreement between Moscow and Ankara.

Two sources in Russia’s defense sector told the paper that the White House’s green light for the supplies of Patriot systems to Turkey is not enough. Talks before the contract should be held and given the $3.5 bln price tag of the deal, it is highly likely that they will have to solve the issue on allocating loans for Turkey," one of the sources said. Some top managers of Russia’s military-industrial complex have described this decision as the US’ response to the Russian-Turkish S-400 deal. "Possible supplies of the US Patriot missile systems to Ankara won’t mean Turkey will be obligated to refuse purchases of the S-400. The contract on the S-400 has been signed and entered into force, and Turkey won’t be able to break it without significant losses," Senior Researcher at the Higher School of Economics Vasily Kashin said. The S-400 system cannot be considered as a full counterpart of the Patriot missiles, as this is a more universal system with a longer range, he said. However, there is enormous experience of combat use of the US system to counter the missile threat in the Middle East, and this is important for Turkey, he noted.

"It is now rational for Turkey from a military and technical standpoint to maintain ties with Russia, the US and China, balancing between these countries and forcing them to hand over technologies and supply more advanced armaments systems," Kashin said.


Izvestia: Germany begs Russia to hold talks on returning property lost in WWII

Berlin is again calling on Russia to return its lost cultural treasures taken from German territory after World War II, the country’s Embassy in Moscow told Izvestia, citing Monica Grutters, Germany’s Commissioner for Culture and the Media. The diplomatic mission notes that Berlin is ready to continue talks on returning the Russian heritage, which is now in Germany.

"The federal government of Germany continues efforts on achieving a peaceful solution to the issue on the repatriation of cultural heritage and will insist on holding talks with Russian government representatives," the Federal Government Commissioner for Culture and the Media said. "We are convinced that cultural items, which personify outstanding achievements of our nation and its history and identity, should not be used as compensation for military losses."

Mikhail Shvydkoy, Special Representative of the Russian President for International Cultural Cooperation and ex-Culture Minister of Russia (2000-2004) told Izvestia that there could be no talk on exchanging trophies until political dialogue is restored with Berlin.

"Against the current background, when Russia is hit by Europe’s sanctions, when there is no true atmosphere of trust between the two countries and no political dialogue, holding such talks is senseless," Shvydkoy stressed.

There is the 1998 law in Russia on cultural values moved to Russia during World War II, under which most these art items are Russia’s cultural heritage and cannot be returned to other countries, he noted.

The Soviet Union returned to Russia more than 1.6 mln art items, including the well-known masterpieces of the Dresden Art Gallery and the Pergamon Altar’s marble friezes. However, it should not be forgotten that during the war the Nazis destroyed and plundered hundreds of thousands of art items and monuments. Just several dozens of them have been returned, he pointed out.


Vedomosti: Russia’s Novatek signs first major contract on building second LNG plant

Russia’s largest independent natural gas producer Novatek on Wednesday signed a contract on designing and constructing gravity-based structure (GBS) platforms for the Arctic LNG 2 project, Vedomosti writes. The contractor will be a joint venue between Italian Saipem and Turkish Renaissance, and the deal is to the tune of $2.2 bln, the Italian company said.

The Italian-Turkish JV will design and build three GBS platforms on an area of more than 50,000 square meters. Each of them will have LNG storage facilities totaling 687 000 m3. Actually, this will be an independent liquefied natural gas plant with the capacity of 6.6 mln tonnes per year. The platforms will be constructed at the Murmansk shipyard.

Last week, Novatek’s first such project, Yamal LNG, started operating at full capacity one year ahead of schedule, and Arctic LNG 2 is the company’s next potential project, but the final investment decision on it is yet to be made. The first leg of the plant is expected to be launched in 2023. In May, Total agreed on buying a 10% stake in the project. Novatek plans to sell not more than 40%. China’s CNPC, Saudi Aramco, Japanese partners and South Korea’s Kogas are showing interest in participating.

The signing of the contract signals Novatek’s serious plans about the project, Fitch Corporation’s Department Director Dmitry Marinchenko said. "Although no final investment decision has been formally made, the company and also potential contractors believe in the project’s success. Low production costs and cold Artic climate, which helps to save money on the price of liquefying gas, make the Arctic LNG 2 project competitive nearly at any gas price," he stressed.


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